Rockets

We have been on a rocket ship ride for a month now in Gold & Miners.  Whenever someone posts a “Rocket” as a headline picture in their report,  we usually immediately get a pullback.  I’m ready, so I thought that I would give it a try 🙂

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This is the rocket (this was my chart from Feb 16). 

We will discuss Precious Metals in a moment,  but first lets do a complete review starting with the SPX…

REVIEW- I had been calling for a drop in the markets since the summer, even before the AUG drop.  Then after the Summer drop and rally, I posted in Dec many charts like this, saying that I still expect the markets to drop further again and for the Precious Metals to rally .

SPX DAILY – Now I have been saying for a couple of weeks that I expect a believable rally.  This would draw in longs , expecting a return to the bull market after a normal correction.  It is struggling here, but I still expect a good rally.

SPX WKLY –  I expect that we could see this.

If this multi week  run takes place, some may want to use UPRO or TQQQ as a vehicle to ride, or find individual set ups in the Nasdaq, SPX, ETC.

USD – I have been expecting a double top to  help Gold for a long time. On Jan 28 I actually pictured a drop to match that first one .

We got that and I drew in a bounce & another drop later.

USD – So far no bounce, but I still think that we may get one.  With a dollar bounce, we may see Gold could pull back.  After that the $usd would continue to drop & Gold could rally again.

OIL REVIEW

Prior reports showed that the XLE didnt make new lows when Oil did, so I looked for Oil to bottom. My price target from Nov on a wkly chart was $26.09,  we hit $26.05.

Oil  gapped up and I drew my expectation of a gap fill, tag of trend line.

We got a perfect tag of the trend line.  Now we see if Oil can rally (looks good).

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NATGAS – I’m not overly bullish, but the set up is fairly bullish and rather low risk. I need to see some upside, it has been a bit week.

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GOLD SILVER & MINERS

GOLD– The flag that I mentioned does seem to be playing out, but we are on day 24. A drop to $1200 is still inside of this flag.  Using cycles, we should expect a daily cycle low soon with a break of that trend line, however.  I expect an eventual dip to the blue area. Maybe we get a quick false break down and then another leg higher.

GOLD WKLY – Gold could go sideways in a pullback

SILVER –  Silver never broke out, so it may do that this week, and it may just consolidate.

 GDX DAILY – As mentioned, in a melt up type of move, we can just keep pushing higher as buyers jump in thinking they are missing the move  ( They often get fooled at tops though). We might put in a bull flag, or just drop down to that 38% area or the gap at the 200sma.  This timing in the daily cycle is great,  it shows that we are right translated.   I saw many people jumping in 2 days ago on that surge higher, that may be a trap. 

Lets look at the weekly charts and examine some points of interest.

In the stronger run of the bear market in June 2013, we had 4 weeks up, then a dip for 2 weeks, and a strong 2nd run higher to the upper trend line.  That looks really easy to ride on this chart, doesn’t it?

GDX –  On a daily chart, not so easy looking. This is how that ride would look. I only put this here because I know that this type of drop ‘Could’ happen, and some trade NUGT. This is just a cautionary note for traders.

I drew this on Friday as a realistic possibility. 

And these 2 charts were in my last report, still valid possibilities. #1 is the melt up, #2 is a pull back.

#1

#2

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Let me just say that some individual miners are melting up.  In past reports I have mentioned these  ( See charts of AUMN, AXU, DRD, HMY,   SBGL , etc).   What can be expected in this situation?

  Look at this chart of AXU & compare it to the chart below it. A melt up from a triangle base can be strong. 

Look at  HMY –  It has completely done its own thing, ignoring ‘cycles’  since November.

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So we are due for a pullback in GOLD & MINERS,  but we can always go a little higher before it starts.  As for individual miners?  HMY, DRD, SBGL, etc shows us that they may act on their own. This is why I have continued to trade MUX, GPL, LSG, EGI, Etc. 

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Finally,  I want to discuss some of the commodity stocks that I have mentioned in past reports.  These have turned into good trades too, and look set up much like the miners.  Some appear to be breaking from a base and they could have great upside potential too. These are trades for now, but could be longer term buy & hold too, if they are bottoming.   Lets review a couple of these now.

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CENX – Feb 3, nice long base with a shake out, ran and pulled back to $4 at the 8 ema.

CENX now – about $2 higher and a larger base to consider.

FCX was mentioned as bottoming near $4, a 2nd buy was at $6.

FCX now, more follow through and a possible 3rd place to add on a pullback.

VALE at $2.32 , a low risk entry 

VALE NOW – another buy coming up. ( Gap fill?)

X Daily – I’ve mentioned AA, AKS, STLD, etc .  I mentioned X when it was basing out around $6.50.  I have been looking at the potential of this stock. Pretty big. The base is in pink.

X  WKLY – US STEEL could be breaking out with a rounding bottom base. If we are looking for a rally in metals, this has huge potential. For now it can be 

So again, the above metals stocks are making good gains for traders, but as time went on, they are offering further areas to add on another trade.  You can see that if they have bottomed and built their bases, they could become buy & hold for longer term gains too.  I am keeping an eye on this.  

Thats the weekend wrap up. There is no guaranteed way of saying whether Gold or Miners will bull flag here , pop a bit higher and then pullback, or just pull back.  I have given the best case scenarios that I see as fitting in.  As mentioned last week, I do still think that we will see the markets rally for a bit,  so traders may find some trade set ups there,  I will be looking for some in the coming days.  I think that the best opportunity will be buying the pullback in miners for another leg higher.   If OIL has bottomed, the energy stocks could also make very fast gains, as we have seen in the past.  I mentioned this in a report last week. I am going to be focusing on OIL & MINERS this week for clues.  Thanks for being here, I hope you all had a restful weekend. Lets look for future opportunities going forward. 

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~ALEX